Paraguay Targets January Bond for Roads, Power

Paraguay is looking at January 2013 for an anticipated benchmark-size 10-year bond, raising funds to support the power and road sectors, an official at the country’s finance ministry tells LatinFinance. “The plan has to be approved by congress in December, and if all goes as planned, part of the proceeds – at least $200m – would be used to finance Paraguayan state power company Ande, in addition to power and road projects,” he says. An issuance of up to $550m is in the budget. The official says Paraguay has selected banks and lawyers in anticipation of the sale. He declines to disclose names, though Citi took the sovereign to visit fixed-income accounts in New York and Boston in September. Paraguay is rated B1/BB minus. The sovereign has been aiming to return to the international bond markets, though it has said it is not in urgent need of funds. Banco Continental Paraguay paved the way earlier this month, pricing a $200m 8.875% 2017 bond. Paraguay will no doubt also be inspired by the recent success of Ba3/BB minus/BB minus Bolivia, which raised $500m at a 4.875% yield, or UST+306bp, after seeing $4.25bn in demand.